1 February 2024
Monthly Market Review
Review of markets over January 2024
Author Following the ‘almost everything rally’ that characterised the final quarter of 2023, performance
across asset classes was mixed in January. Strong growth data, coupled with pushback from
some central bankers on the market’s dovish outlook for rate cuts, proved a less positive
environment for fixed income. Segments of risk assets, meanwhile, were buoyed as economic
data further fuelled hopes for a ‘soft landing’. This optimism was slightly tempered at the end of
the month when the Federal Reserve (the Fed) struck a less dovish tone at its January meeting.
Zara Nokes Growth stocks were the notable outperformer, returning 2.1% over the month, compared to the
Global Market relatively lacklustre performance of their value counterparts, which delivered 0.3%. Developed
Analyst market equities were up 1.2%, while emerging market equities were down 4.6%, despite newly
announced stimulus from the People’s Bank of China (PBOC).
Commodities also performed well, with the broad Bloomberg Commodity Index rising 0.4% over
January. Oil prices rallied as tensions in the Middle East worsened and disruption to shipping
through the Suez Canal continued. Drone attacks on Russian energy infrastructure added to the
uncertainty in the global oil market.
Real estate investment trusts and small caps – both of which are sensitive to interest rates –
struggled as markets pared back the magnitude of rate cuts priced for the Federal Reserve in
2024, and ended the month down 4.0% and 2.8% respectively.
Exhibit 1: Asset class and style returns
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Jan ’24
Global Small Global Small Global Global
Growth MSCI EM Growth Growth Cmdty Growth Growth
REITS cap REITS cap Agg REITs
3.5% 37.8% 34.1% 34.2% 16.1% 37.3% 2.1%
23.0% 32.9% 22.9% 13.3% -1.2% 32.6%
Global Global DM DM DM
MSCI EM Value Growth Value Growth MSCI EM Cmdty Value
REITS REITS Equities Equities Equities
18.6% 27.5% 6.5% 13.2% 28.5% 18.7% 27.1% -5.8%
0.6% -4.9% 28.4% 24.4% 1.2%
Small DM DM Small Small Small DM Global Small
Cmdty Growth Value Cmdty
cap Equities Equities cap cap cap Equities Agg cap
11.8% -6.4% 22.8% 0.4%
18.1% 27.4% 5.5% 0.1% 23.2% 26.8% 16.5% -16.2% 16.3%
DM DM DM Global Small DM DM
Growth Growth Value MSCI EM Value Value
Equities Equities Equities REITs cap Equities Equities
16.6% 27.2% 4.4% 11.6% 12.4% 0.3%
-0.3% 23.1% -8.2% 24.4% 16.5% 22.3% -17.7%
DM Global Small Global DM Global Small Global Global
Value Value Value Growth
Equities REITS cap Agg Equities Agg cap REITs Agg
18.0% -10.1% 22.7% 21.4%
16.5% 2.3% 2.3% -3.2% 8.2% 9.2% -18.4% 10.9% -1.4%
Global Global Global Small Small
Value MSCI EM Value Cmdty MSCI EM Value MSCI EM MSCI EM
Agg REITS REITS cap cap
16.4% -2.3% -4.1% -11.2% 18.9% -0.4% -19.7% 10.3%
0.6% 6.5% 8.0% 16.2% -2.8%
Global Global Global Small Global Global Global
MSCI EM MSCI EM Growth Cmdty Cmdty MSCI EM
Agg Agg Agg cap REITs Agg REITs
-1.8% -14.6% 3.2% 7.7% -3.1% -2.2%
4.3% -2.6% 7.4% -13.5% -23.7% 5.7% -4.0%
Global Global Global Global
Cmdty Cmdty Cmdty Cmdty Cmdty MSCI EM Growth Cmdty MSCI EM
Agg Agg REITs Agg
-1.1% -9.5% -17.0% -24.7% 1.7% -14.2% -29.1% -7.9% -4.6%
2.1% 6.8% -10.4% -4.7%
Source: Bloomberg Barclays, FTSE, LSEG Datastream, MSCI, J.P. Morgan Asset Management. DM Equities: MSCI World; REITs:
FTSE NAREIT Global Real Estate Investment Trusts; Cmdty: Bloomberg Commodity Index; Global Agg: Bloomberg Global
Aggregate; Growth: MSCI World Growth; Value: MSCI World Value; Small cap: MSCI World Small Cap. All indices are total return in
US dollars. Past performance is not a reliable indicator of current and future results. Data as of 31 January 2024.
Equities
The best performing major equity market in January was the TOPIX Index, up 7.8% on the month,
continuing the strong performance seen last year. An unexpectedly weak wage print, combined
with uncertainty around the economic impact of the New Year’s Day earthquake, led markets to
reassess the likelihood of negative interest rate policy (NIRP) removal in the near term.
In the US, the S&P 500 Index was propelled to record highs in early January as optimism around
a ‘soft landing’ scenario continued the rally in the ‘Magnificent Seven’ stocks. A number of
data releases pointed to the ongoing resilience of the US economy. First, we saw a robust
jobs report, with 216k jobs added to the economy in December, alongside firmer wage growth
and unemployment remaining steady at 3.7%. Later in the month a blowout GDP print of 3.3%
annualised for the fourth quarter was significantly above consensus expectations. Following a
strong start, the S&P Index closed the month on a weaker note, as the hawkish tone at the Fed’s
January 31 meeting was not taken well by risk markets. The Fed pushed back on dovish market
pricing for rate cuts, and explicitly noted that a March cut seems unlikely.
Exhibit 2: World stock market returns
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Jan ’24
MSCI MSCI MSCI
Japan US S&P Japan UK FTSE US S&P US S&P US S&P UK FTSE Japan Japan
Asia ex- Asia ex- Asia ex-
TOPIX 500 TOPIX All-Share 500 500 500 All-Share TOPIX TOPIX
Japan Japan Japan
54.4% 13.7% 12.1% 16.8% -4.4% 31.5% 28.7% 0.3% 28.3% 7.8%
22.7% 42.1% 25.4%
MSCI MSCI MSCI MSCI
Japan US S&P Japan US S&P UK FTSE Japan US S&P
Europe MSCI EM Europe MSCI EM Europe Europe
TOPIX 500 TOPIX 500 All-Share TOPIX 500
ex-UK 37.8% ex-UK 18.7% ex-UK ex-UK
20.9% 32.4% 10.3% 12.0% -9.5% -2.5% 26.3%
9.1% 27.5% 24.4% 2.1%
MSCI MSCI MSCI MSCI MSCI MSCI
US S&P Japan UK FTSE US S&P UK FTSE US S&P
Europe Europe Europe MSCI EM Europe Europe Europe
500 TOPIX All-Share 500 All-Share 500
ex-UK ex-UK ex-UK 11.6% ex-UK ex-UK ex-UK
1.4% 22.2% 19.2% 18.4% 18.3% 1.7%
20.0% 24.2% 7.4% -10.6% -12.2% 17.3%
MSCI MSCI MSCI
UK FTSE UK FTSE US S&P Japan Japan US S&P UK FTSE
MSCI EM Asia ex- Asia ex- Asia ex- MSCI EM MSCI EM
All-Share All-Share 500 TOPIX TOPIX 500 All-Share
18.6% Japan Japan Japan 18.9% 10.3%
20.8% 1.0% 21.8% 7.4% 12.7% -18.1% -1.3%
5.1% 5.8% -14.1%
MSCI MSCI MSCI MSCI MSCI MSCI MSCI
US S&P UK FTSE UK FTSE
Asia ex- Asia ex- Europe Europe MSCI EM Asia ex- Europe MSCI EM Asia ex- MSCI EM
500 All-Share All-Share
Japan Japan ex-UK ex-UK -14.2% Japan ex-UK -2.2% Japan -4.6%
16.0% 1.2% 7.9%
3.3% -8.9% 3.2% 14.5% 18.5% 2.1% -19.4%
MSCI MSCI MSCI
UK FTSE Japan UK FTSE Japan Japan UK FTSE
MSCI EM MSCI EM MSCI EM Asia ex- MSCI EM Asia ex- Asia ex-
All-Share TOPIX All-Share TOPIX TOPIX All-Share
-2.3% -1.8% -14.6% Japan -19.7% Japan Japan
12.3% 0.3% 13.1% -16.0% 18.1% -9.8%
-4.5% 6.3% -5.4%
Source: FTSE, LSEG Datastream, MSCI, S&P Global, TOPIX, J.P. Morgan Asset Management. All indices are total return in local
currency, except for MSCI Asia ex-Japan and MSCI EM, which are in US dollars. Past performance is not a reliable indicator of
current and future results. Data as of 31 January 2024.
The MSCI Europe ex-UK Index delivered positive returns of 2.1% in January. The European Central
Bank (ECB) kept rates on hold at its January meeting and re-iterated its commitment to remain
data-dependent. The composite purchasing managers’ index (PMI) rose 0.3 pts to a preliminary
47.9 in January, its highest level since July. The manufacturing measure beat expectations by 1.8
points, suggesting that activity in the sector bottomed out in the third quarter.
2 Review of markets over January 2024
UK equities stalled in January, with the FTSE All-Share falling 1.3%. On the one hand, there
have been signs of growth momentum accelerating in the UK, with the flash composite PMI
increasing 0.4 points to 52.5, and consumer confidence hitting a two-year high in January. This
optimism was tempered by the latest retail sales print, which fell sharply by 3.2% month-on-
month, sparking some concerns of an impending slowdown.
In China, the domestic economy continued to struggle, with disappointing retail sales and
further deterioration in housing activity. Fourth quarter GDP grew 5.2% year-on-year, in line with
expectations, but still historically weak. Although the PBOC announced a number of stimulus
measures, it was not the policy ‘bazooka’ markets were hoping for to re-ignite activity. Ongoing
concerns around the economic outlook for China likely contributed to the weak performance of
the MSCI Asia ex-Japan Index and the MSCI Emerging Markets Index, which declined 5.4% and
4.6% on the month.
Fixed income
While strong economic data added credence to market hopes for a ‘soft landing’, it also made
pre-emptive rate cuts in the first quarter look less likely. Core government bonds reversed some
of last year’s gains, as markets scaled back the number of rate cuts priced for 2024.
Global government bonds were down 1.8% over the month, but it was UK Gilts that remained the
major laggard, as sticky services inflation and still elevated wage growth made the prospect of
imminent rate cuts from the Bank of England (BoE) look unlikely.
Exhibit 3: Fixed income government bond returns
2015 2016 2017 2018 2019 2020 2021 2022 2023 Jan ’24
Italy UK Global Spain Italy Global Japan Japan Italy Italy
4.8% 10.7% 7.5% 2.5% 10.6% 9.7% -0.2% -5.4% 9.3% 0.1%
Spain Spain US Germany Spain UK US US Spain US
1.7% 4.1% 2.3% 1.9% 8.3% 8.9% -2.3% -12.5% 6.9% -0.3%
Japan Germany UK Japan UK US Germany Global Germany Spain
1.2% 3.4% 2.0% 1.0% 7.1% 8.0% -2.9% -16.8% 5.7% -0.5%
US Japan Spain US US Italy Italy Italy Global Germany
0.8% 3.2% 1.1% 0.9% 6.9% 7.9% -3.0% -17.2% 4.3% -0.6%
UK Global Italy UK Global Spain Spain Germany US Japan
0.5% 1.7% 0.8% 0.5% 5.6% 4.3% -3.0% -17.4% 4.1% -0.8%
Germany US Japan Global Germany Germany UK Spain UK Global
0.4% 1.0% 0.2% -0.7% 3.1% 3.0% -5.3% -17.5% 3.6% -1.8%
Global Italy Germany Italy Japan Japan Global UK Japan UK
-3.7% 0.8% -1.0% -1.3% 1.7% -0.8% -5.8% -25.1% 0.5% -2.4%
Source: Bloomberg Barclays, LSEG Datastream, J.P. Morgan Asset Management. All indices are Bloomberg Barclays benchmark
government indices. All indices are total return in local currency, except for global, which is in US dollars. Past performance is
not a reliable indicator of current and future results. Data as of 31 January 2024.
J.P. Morgan Asset Management 3
Within credit, the European high yield bond market was the outlier in posting positive returns,
delivering 0.9%, while its US counterpart delivered flat returns over the month. Global investment
grade credit, meanwhile, posted negative returns in January despite spreads tightening.
A stronger US dollar was a headwind for emerging market debt, which fell 1.2% on the month.
Exhibit 4: Fixed income sector returns
2015 2016 2017 2018 2019 2020 2021 2022 2023 Jan ’24
Euro Gov. US HY EM Debt Euro Gov. EM Debt Global IL US HY US HY US HY Euro HY
1.6% 17.5% 9.3% 1.0% 14.4% 12.7% 5.3% -11.2% 13.5% 0.9%
EM Debt EM Debt Global IG US Treas. US HY Global IG Euro HY Euro HY Euro HY US HY
1.2% 10.2% 9.1% 0.9% 14.4% 10.4% 3.4% -11.7% 11.9% 0.0%
US Treas. Euro HY Global IL US HY Global IG US Treas. Global IL US Treas. EM Debt US Treas.
0.8% 10.1% 8.7% -2.3% 11.5% 8.0% 2.7% -12.5% 10.5% -0.3%
Euro HY Global IG US HY Global IG Euro HY US HY EM Debt EM Debt Global IG Euro Gov.
0.5% 4.3% 7.5% -3.6% 10.7% 6.1% -1.5% -16.5% 9.6% -0.5%
Global IG Global IL Euro HY Euro HY Global IL EM Debt US Treas. Global IG Euro Gov. Global IG
-3.6% 3.9% 6.1% -3.6% 8.0% 5.9% -2.3% -16.7% 7.1% -0.6%
US HY Euro Gov. US Treas. Global IL US Treas. Euro Gov. Global IG Euro Gov. Global IL EM Debt
-4.6% 3.2% 2.3% -4.1% 6.9% 5.0% -2.9% -18.5% 5.8% -1.2%
Global IL US Treas. Euro Gov. EM Debt Euro Gov. Euro HY Euro Gov. Global IL US Treas. Global IL
-5.0% 1.0% 0.2% -4.6% 6.8% 2.7% -3.5% -22.9% 4.1% -2.0%
Source: Bloomberg Barclays, BofA/Merrill Lynch, J.P. Morgan Economic Research, LSEG Datastream, J.P. Morgan Asset
Management. Global IL: Bloomberg Global Inflation-Linked; Euro Gov.: Bloomberg Euro Aggregate - Government; US Treas:
Bloomberg US Aggregate Government - Treasury; Global IG: Bloomberg Global Aggregate - Corporate; US HY: BofA/Merrill Lynch
US HY Constrained; Euro HY: BofA/Merrill Lynch Euro Non-Financial HY Constrained; EM Debt: J.P. Morgan EMBIG. All indices
are total return in local currency, except for EM and global indices, which are in US dollars. Past performance is not a reliable
indicator of current and future results. Data as of 31 January 2024.
Following the excitement seen at the end of last year, January offered mixed results for investors.
While equity markets were initially boosted by the strength of recent activity data, performance
was pared back by the hawkish tone at the Fed’s January meeting. Bond markets were volatile,
as strong growth data did not justify the magnitude of rate cuts priced in at the end of last year.
Despite this recent re-pricing, we still have high conviction in core bonds, both for their income
offering, but also their diversification potential. If the resilience of the economy does fade, bonds
will play a critical role in a diversified portfolio.
4 Review of markets over January 2024
Exhibit 5: Index returns for January 2024
Index GBP USD JPY EUR LOC
Equities (MSCI)
MSCI World Index 1.3 1.2 5.0 2.9 1.8
MSCI USA 1.7 1.6 5.3 3.3 1.6
MSCI Europe ex-UK 0.4 0.3 4.0 2.0 2.1
MSCI United Kingdom -1.2 -1.3 2.3 0.3 -1.2
MSCI Japan 4.7 4.6 8.5 6.4 8.5
MSCI AC Asia ex-JP -5.3 -5.4 -2.0 -3.8 -4.4
MSCI EM Latin America -4.7 -4.8 -1.3 -3.2 -3.1
MSCI EM (Emerging Markets) -4.5 -4.6 -1.1 -3.0 -3.5
Bonds
Bloomberg Barclays Global Aggregate -1.3 -1.4 2.3 0.3
Bloomberg Barclays US Aggregate -0.2 -0.3 3.4 1.4 -0.3
Bloomberg Barclays Japan Aggregate -4.0 -4.1 -0.6 -2.5 -0.6
Bloomberg Barclays UK Aggregate -1.8 -1.9 1.7 -0.2 -1.8
Bloomberg Barclays Euro Aggregate -1.9 -2.0 1.6 -0.3 -0.3
Currencies
Sterling -0.1 3.8 1.7
US dollar 0.1 3.7 1.7
Yen -3.6 -3.6 -1.9
Euro -1.6 -1.7 2.0
Source: Bloomberg Barclays, LSEG Datastream, MSCI, J.P. Morgan Asset Management. Past performance is not a reliable
indicator of current and future results. Data as of 31 January 2024.
J.P. Morgan Asset Management 5
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